Uh-oh. That two-day rebound this week may have been a head fake.
On Monday, the market chatter was about a significant sell-off, maybe even a serious correction. But some of that fear was apparently washed away when stocks bounced back on Tuesday and Wednesday. Well, the fear is back.
The Dow Jones industrial average (^DJI) tumbled 267 points, the Nasdaq composite (^IXIC) plunged 129 and the Standard & Poor's 500 index (^GPSC) dropped 39 points. It's the Nasdaq's biggest point loss in more than a year.
Anything related to health care -- especially biotechs -- got clobbered.
A closely watched biotech index slid 5.5 percent. Amgen (AMGN), Celgene (CELG) and Gilead (GILD) all fell by 5 percent or more. %VIRTUAL-article-sponsoredlinks%We mention Celgene often; it's extremely volatile. Look at the chart: over the past three months, the stock has lost 17 percent.
Even big drug stocks took a hit. Pfizer (PFE), Johnson & Johnson (JNJ), Merck (MRK), Bristol-Myers Squibb (BMY) and Eli Lilly (LLY) all fell about 2 percent.
Internet and social media stocks also resumed their decline. Google (GOOG) and Amazon.com (AMZN) both down more than 4 percent. Netflix (NFLX) and Facebook (FB) fell 5 percent. LinkedIn (LNKD) lost 3.5 percent. Pandora Media (P) slid 10.5 percent.
EBay (EBAY) fell 3 percent after activist investor Carl Icahn withdrew his proposal for the company to spin off its PayPal unit.
Many old tech stocks also lost ground. Microsoft (MSFT) fell 2.5 percent and Intel (INTC) lost 2 percent.
Financial stocks were also hard hit. American Express (AXP), Visa (V) and JPMorgan Chase (JPM) all lost about 3 percent. Ally Financial picked the wrong day to go public. Its IPO fell 4 percent from its $25 offering price.
Other big movers:
Bed, Bath & Beyond (BBBY) lost 6 percent as net fell short of expectations.
PriceSmart (PSMT) dropped 12 percent even though earnings were in line.
The big loser was the network security firm Imperva (IMPV). It tumbled 44 percent after slashing its outlook.
We did find a few winners:
Rite Aid (RAD) gained 8.5 percent as earnings easily beat expectations.
And Ruby Tuesday (RT) rose 12 percent. Its loss wasn't as steep as expected.
-Produced by Drew Trachtenberg.
What to Watch Friday:
The Group of 20 finance ministers and central bank chiefs meet in Washington.
The Labor Department releases producer prices for March at 8:30 a.m. Eastern Time.
The University of Michigan releases its preliminary survey of consumer sentiment for April at 9:55 a.m.
These major companies are scheduled to report quarterly financial results:
After Market: Tech Stocks See Worst Day Since 2011
The 1099 forms you received from brokerages and other financial institutions might not be the last ones they send. It's common for them to issue corrected versions a little later. Consider getting your tax return ready to go, then waiting until close to April 15 before submitting it. That way, you can incorporate any last-minute changes and avoid having to file an amended return.
Pay attention to when you sell any holding, because the capital gains tax rates differ for long-term and short-term holdings. Short-term capital gains are taxed at your ordinary income tax rate, which could top 30 percent. Long-term gains (those held for more than a year) get preferential rates, which are zero percent for those in low-income brackets and 15 percent for most of us.
If you own underwater stocks, consider selling them for a loss. You can use those losses to offset gains from other sales, reducing your taxes owed. You can always buy back the asset later, if you still believe in it -- just be sure to wait for 31 days to pass, to observe the "wash sale rule."
If you're planning to sell one or more holdings that will give you a really big gain, submit an amended W-4 form to increase your withholding, or send the IRS an estimated tax payment. Underpaying your taxes significantly during the year can lead to a penalty at tax time. You may be protected by a "safe harbor" provision, though, which can save you from having to jump through those hoops.
If you're planning to buy shares of a mutual fund, determine when it will distribute its dividends. Many funds do so near the end of the year, and when that happens, the fund's share price will drop by the amount of the distribution -- which is taxable to shareholders. It's better to just wait until after that payout to buy in.
Mutual funds with high turnover ratios (reflecting a lot of buying and selling in a fund) have expenses for these trades. It's worth favoring funds with low turnover ratios, especially index funds and index-tracking ETFs, which simply hold onto the mix of securities in a given index, without a lot of trading activity. (Index funds generally outperform their higher-turnover counterparts, too.)
Boost the power of your Individual Retirement Accounts by making your annual contributions early in the year, giving the funds more time to grow. Over decades, it can make a significant difference.